MANILA - Philippine banks have more than enough capital and liquidity to manage about $400 million in loan exposure to South Korean shipbuilder Hanjin, the Bangko Sentral ng Pilipinas said Wednesday.
Loans to Hanjin account for just 0.24 percent of total loans of the banking system and based on stress tests, writing off these debts will have minimal impact on the adequacy of industry capital, the BSP said.
Banks have a capital adequacy ratio of 15.36 percent as of September 2018, almost double the 8 percent international standard and above the BSP's 10-percent requirement, the regulator said.
"Based on the latest data, the BSP is confident about the local banks’ ability to manage this specific challenge. They are also equipped to handle the negotiations required to complete Hanjin’s corporate restructuring while remaining compliant with prudential regulations," the BSP said in a statement.
Some of Hanjin's biggest creditors earlier also downplayed the size of their loan exposures to the troubled shipbuilder.